Farm Ireland

Wednesday 22 November 2017

Dept thought needed before cutting budget

Declan O'Brien

Declan O'Brien

Agriculture Minister Simon Coveney is facing into a busy few weeks, given that the spending plans for each department have to be presented to the Department of Finance shortly.

Serious cutbacks in the overall spend by the Department of Agriculture have been flagged, not only by Mr Coveney but also in the deal agreed with the EU/IMF.

This agreement states that the current spend on agriculture has to fall from €1.379bn to €1.136bn for next year, while the capital budget will be cut by €120m. The total drop is around €360m.

In quoting the Troika line, Mr Coveney has been accused in some quarters of simply accepting the inevitability of cuts rather than fighting his corner more vigorously.

Holders of this view argue that these Budget negotiations will represent the first real test for the minister and that he must deliver for farmers.

The ball is bouncing well for the minister in that several schemes are coming to a natural end this year, thereby providing savings of €160m.

Among these are REPS 3, the Farm Waste Management Scheme, the Early Retirement Scheme and spending associated with the pork dioxin compensation package. In addition, the total wage bill of the Department continues to fall, giving additional savings.

However, further cutbacks of €200m have to be found. The question is where is the axe going to fall to deliver these savings, or should Mr Coveney be arguing that the €160m, which will come automatically this year, is sufficient?

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It is difficult to argue against cuts to the overall agriculture budget when areas such as health and education are taking serious hits.

However, it has to be said that agriculture has already endured significant cutbacks, in 2008 and 2009.

It must also be recognised that agriculture is one of the few areas that offers realistic possibilities for growth. And that should be good news for a Government that is battling to nurture every scrap of growth in the economy.

Farming has certainly bucked the economic trend over the past two years but this recovery in incomes was from a historically low base.

Teagasc research also shows that incomes from beef and sheep continue to be underpinned by direct payments.

The fact that 11,000 people require Farm Assist also confirms that all is not rosy in the sector.

Unfortunately, the reality is that cuts in some form or other are likely. There have been worrying noises about the Suckler Cow Welfare Scheme and the Disadvantaged Area payments.

However, cuts in either of these would hit those farmers with the weakest incomes. If cuts must come, some thought is needed.

Indo Farming